T hi s di s pos i t i on i s notappr opr i a t e f orpubl i c a t i on and i s notpr e c e de nt * e xc e pta s pr ovi de d by 9th C i r . R . 36- 3. NOT F OR P UB L I CAT I ON UN I TE D STATE S C OU RT OF APPE ALS FOR T HE NI NTH CI RC UI T JA S O N JO H N S O N ; S H E L L IE J O H N S O N , i ndi vi dua l l y a nd a s c oc o n s e rv a to r s f

o rN a th a n ie l J o h n s o n , a m i no r, P l ai n t i ffs - A p p el l an t s, v. AME R I C AN I NS UR AN C E C OMP AN Y, D ef

endant- A pp el l ee . N o. 08- 35992 D . C. N o . 2 : 0 7 - c v - 0 0 0 6 9 - REC- J CL ME MOR AN DU M *

A pp ea l fr om the U ni t ed S t at es D i stri ctC ou rt f orthe D i s tr i c tof

M ont a na R i c ha r d F . C e bul l , C hi e f D i s tr i c tJ udge , P r e s i di ng A r gue d a nd S ubm i tt e d A pr i l 7, 2010 S e a tt l e , W a s hi ngt on B efo re: G O O D W IN , H A W K IN S , an d N . R . S M IT H , C i rcu i tJu d g es. P l ai nt i ff s J as on John son and S hel l i e J oh nson (c ol l ec t i vel y “ P l ai nt i ff s” ), i ndi vi dua l l y a nd a s c ons e rva t or s f orN a tha ni e l J ohns on, appe a l aj udgm e nti n f a vor of D ef endantT he A m er i can Insurance Co m pany (“ D ef endant ”) w here i n the di stri ct 

# FI LED APR28 2 010 M OLLY C. DW Y ER, CLERK U . S. C O U R T OF APPE ALS2

courtadop t ed the m agi stra t e j ud ge’ s f i nd i ng s and re com m endat i on thatan i ns ur a nc e c ontr a c tc ont a i ne d am utua l m i s t a ke a nd s houl d be r e f orm e d t o e xc l ude c o v e r a g e . W e h a v e j u r i s d i c t i o n u n d e r2 8 U . S. C. § 1 2 9 1 . W e a f f i rm. F rank R eul i ng d/b/ a L adder C anyon R anch (“ L C R ”) ow ned 2 1 v ehi cl es i nsured by D ef

endant , i ncl ud i ng tw o 1 98 9 C hevrol etS ub urbans: on e w i th a V IN e n d i n g i n 6 0 4 0 , a n d o n e w i th aV I N e n d i n g i n 5 8 0 3 . I n N o v e mb e ro f 2 0 0 1 , LCR en t ered an o ral co n tractt o sel l th e 6 0 4 0 S u b u rb an t o an em p l o yee, W ayn e D ean s. I n J a nua ry of

2002, D e a ns pr ovi de d pr oof of i ns ur a nc e t o G l e n H ough, w ho m a i nt a i ne d L C R ’ s i ns ur a nc e c ontr a c t s pur s ua ntt o ac ons ul t i ng a gr e e m e nt . H ough cont ac t ed W es t ern S t at es Insurance A gency ( “ W es t ern S t at es ”) , an i nsurance brok er , and request ed thatthe vehi cl e be r em ov ed fr om L C R ’ s pol i cy . H ow ever , th e r e c o r d is u n c le a ra s to w h a t, if a n y , id e n tif

y in g in f o rm a tio n H o u g h p r o v id e d . W e s t e rn S t a t e s i n turn s e ntam e m o t o D e f e nda nti ns truc t i ng i tt o “ D e l e t e : 1989 S uburba n. ” D e f

e nda ntm i s t a ke nl yr e m ove d onl ythe 5803 S uburba n. T hus , the 6 0 4 0 S u b u rb a n w a s s till lis te d o n th e p o lic yo n M a r c h 3 1 , 2 0 0 2 , w h e n M ic h e lle R i es, o p erat i n g th e v eh i cl e w i th D ean s’ s p erm i ssi o n , stru ckan d i n j u red P l ai n t i ffs’ c h ild . P l ai nt i ff

s s ued R i es and sett l ed for aconfes se d j ud gm entof $4 00 , 00 0 and an a s s ig n m e n t o f

R ie s ’s r ig h ts a g a in s t D e f e n d a n t in e x c h a n g e f

o rac o v e n a n t n o t to3

exec ut e the j ud gm ent . P l ai nt i ff s then fi l ed the i nst antac t i on se eki ng a dec l ar at ory j u d g m en tth atth e acciden tw as co v ered u n d er th e p o l i cy. T he di stri ctcourtcorr ec t l y hel d thatcl ear and conv i nci ng evi dence proved the m utual i nt ent i on of L C R and D ef endantw as t o rem ov e the 60 40 S ub urban f r om the pol i c y . M ont a nal a w a l l ow s ac ourtt o r e f orm ac ontr a c tt o m e e tthe m u tu a l in te n tio n o f

th e p a rtie s if

th e c o n tr a c t c o n ta in s am u tu a l m is ta k e . See M o n t. C ode A nn. § 28- 2- 1611; P u ls e v . N . A m . L a n d

T itle C o . o f Mo n t. , 707 P . 2d 1105, 1108 ( M ont . 1985) . T he di s tr i c tc ourta l s o c orr e c t l yhe l d tha tthe i nt e ntof the i ns ur e ra nd the i ns ur e d c ontr ol l e d the r i ghtt o r e f orm a t i on. P la in tif f s a r g u e th a t M o n ta n ala w b a r s r e f o rm a tio n o f

th e p o lic ys o a s to defe atcoverage, because P l ai nt i ff s bec am e goo d fai th p urchas er s f or val ue w hen th e y a g r e e d n o t to e x e c u te th e ju d g m e n t a g a in s t R ie s in e x c h a n g e f o rh e rr ig h ts a g a in s t D e f

e n d a n t. See M on t . C od e A nn . § 2 8-2-16 11 . H ow ever , P l ai nt i ff s w er e a w a r e tha tD e f

e nda ntc ont e s t e d c ove r a ge be f or e P l a i nt i f

f s e nt e r e d i nt o the a gr e e m e ntw i th R i e s , a nd the r e f or e P l a i nt i f

f s a r e notbonaf

i de pur c ha s e r s w i thout no t i ce . AF F I R ME D.